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in Commerce, CA
Both FHA and VA loans offer low-barrier entry to homeownership in Commerce, but they serve different borrowers. Veterans and active military get unbeatable terms with VA loans, while FHA opens doors for anyone who qualifies.
The choice isn't about which loan is better overall. It's about which one you're eligible for and what you're willing to pay upfront versus monthly.
FHA loans let you buy in Commerce with just 3.5% down if your credit score hits 580. That's $14,000 down on a $400,000 property, which matters in a competitive LA County market.
The trade-off is mortgage insurance that sticks around for the loan's life on most purchases. You'll pay an upfront premium of 1.75% plus annual premiums between 0.55% and 1.05% depending on your down payment and loan amount.
Credit flexibility goes both ways here. We see FHA approvals with scores as low as 580, sometimes 500 with 10% down. Debt-to-income ratios can stretch to 50% with strong compensating factors.
VA loans require zero down payment in Commerce, full stop. That's the single biggest advantage for eligible veterans and service members buying in Los Angeles County.
You'll pay a funding fee unless you're exempt due to disability. That fee ranges from 2.15% to 3.3% for first-time use, but it gets rolled into the loan. No monthly mortgage insurance ever.
Lenders typically want 620 credit scores, though we've seen approvals lower with manual underwriting. VA loans also allow 100% financing on multi-family properties up to four units if you occupy one.
Eligibility splits these loans apart immediately. VA requires military service through active duty, reserves, National Guard, or as a surviving spouse. FHA just requires legal residency and employment.
Down payment tells the next part of the story. VA offers 0% down to all eligible borrowers. FHA needs 3.5% down with 580+ credit, or 10% down with scores between 500-579.
Monthly costs diverge after closing. FHA borrowers pay mortgage insurance premiums for the loan's life on most purchases. VA borrowers never pay monthly mortgage insurance, though they did pay that upfront funding fee.
Property requirements differ too. VA appraisers hold stricter standards for safety and habitability than FHA. Commerce has older housing stock, so VA inspections sometimes flag issues that FHA would pass.
If you're eligible for VA benefits, use them. The math favors VA loans in almost every scenario we run. Zero down plus no monthly mortgage insurance beats 3.5% down with permanent insurance premiums.
FHA makes sense when VA isn't an option or when the property won't pass VA's stricter inspection standards. We also use FHA for buyers with credit scores below 620 who need maximum flexibility.
Run the numbers on your specific situation. A $400,000 purchase on FHA means $14,000 down plus $250-300 monthly in mortgage insurance. That same purchase on VA means $0 down and no monthly insurance, just the one-time funding fee.
Yes, VA loan benefits restore after you sell and pay off the previous VA loan. You can also use remaining entitlement for a second property while keeping the first.
Only if you put down 10% or more—then it drops after 11 years. With 3.5% down, mortgage insurance stays for the full loan term.
VA loans typically price 0.25% to 0.50% lower than FHA. Rates vary by borrower profile and market conditions, but VA consistently wins on rate.
Neither works for pure investment properties. Both require you to occupy the home as your primary residence, though multi-unit properties are allowed.
FHA goes as low as 580 for 3.5% down, sometimes 500 with 10% down. VA lenders typically want 620 minimum, though exceptions exist.